IFRS S1 sustainability materiality
Materiality is assessed in the context of the reporting entity and its general-purpose financial reports. Both the nature and magnitude of information can matter. First identify sustainability-related risks and opportunities that could reasonably be expected to affect prospects, then decide what information about those items is material to investors, lenders and other creditors. IFRS S1’s primary-user perspective is not automatically identical to the materiality approach in every other sustainability reporting framework.
Worked example
A small current expense may relate to a water restriction that could shut a major production site. Although today’s cost is small, information about the potential disruption and management response may be material because of its nature and possible future effect.
Common mistake
Applying a fixed monetary threshold alone, or treating IFRS S1’s primary-user materiality assessment as automatically identical to ESRS double materiality.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |